Oct. 18 (Bloomberg) -- Lebanon is considering tax increases
to help pay for higher salaries for civil servants and public
school teachers, who are calling for strikes.

The government is discussing options including raising
value-added tax on imported cars to 15 percent from 10 percent,
higher stamp fees for building permits, and increasing taxes on
interest earned by bank deposits to 7 percent from 5 percent,
Information Minister Walid Daouk said after a Cabinet meeting
late yesterday. The higher deposit tax may apply to foreign-currency accounts only, Prime Minister Najib Mikati said today.
The Cabinet is due to meet Oct. 31 for a final decision.

The government approved pay rises last month but said it
can’t implement them until new sources of income are found. Many
Lebanese schools were closed today in response to a call by the
teachers’ union to strike, and other labor groups representing
civil servants have urged similar actions.

The pay increases would need approval in parliament, where
many lawmakers oppose them and have warned of risks to the
economy. Lebanon is the Arab world’s most indebted nation, with
debt equal to 134 percent of gross domestic product in 2011.

Mikati said at a press conference in Beirut that whatever
steps the government takes won’t put Lebanon’s financial
stability at risk.